CRH has hired Bank of America to launch the sale of its European distribution business in a deal valuing the unit at about €2bn including debt, sources familiar with the matter said.

Shares closed up 0.20pc at €29.13 each after the news yesterday.

At the end of February, CRH management had said a strategic review of the European Distribution unit would conclude “in between six-weeks and six-months” but said it would not necessarily lead to a sale. The unit operates in Germany, France, Switzerland and the Benelux.

A sale process is now expected to kick off next month and has already drawn interest from buyout funds including Advent, Lone Star and CVC, the sources said.

Lone Star, which owns Nordic building materials supplier Stark, is also working on a similar deal to buy Saint Gobain’s Raab Karcher business which specialises in providing building materials to the German market. CRH, Bank of America, Lone Star, CVC and Advent declined to comment.

The sources said CRH has been closely monitoring Saint-Gobain’s divestiture and was waiting for the auction to enter its final stages before putting its own distribution business on the block as it would appeal to the same bidders.

CRH is due to provide a trading update on April 24, with management possibly announcing plans to offload the unit which operates in Germany, France, Switzerland and the Benelux.

The division has core earnings of €181m and could fetch a valuation of about €2bn, representing a multiple of 11 times its core earnings.

One of the sources said CRH needs to find a new owner which could turn around the division ahead of a possible recession that would have painful consequences for the building industry.

CRH has been ruthless in recent years in dumping businesses it did not feel were delivering high enough returns and chasing more attractive ones as it aims to improve its ebitda margin by 300 basis points by 2021, a target announced a year ago.

CRH boss Albert Manifold said in February that the company had sold 35pc of all businesses it owned when he took over in 2013 and that half of 2018’s record year of profitability was delivered with businesses it acquired over the same period.

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